What is a stock?


What is a stock?

Understanding Shares

Holding shares (stocks) simply means owning parts of a company whose shares one acquires. Shareholders, therefore, participate in a company as co-owners. A company issues these shares in exchange for capital.

In return, shareholders participate financially in the company's success and in the company's stock price performance. These rights are divided into management rights and property rights.

In principle, the term share is directly associated with the stock exchange, i.e. the trading place for securities of all kinds. However, a company that issues shares does not necessarily have to be listed on the stock exchange. But most companies that shareholders are dealing with are listed on stock exchanges and are usually actively traded.

In Germany, many companies have a legal form on the stock exchange as a stock corporation (or public company) (AG) or a partnership limited by shares, KGaA. There is also the European form (Societas Europaea, abbreviated SE), the US Inc, and the British PLC.

Types of shares

A distinction is made between bearer shares and registered shares. As a rule, bearer shares are traded on the stock exchange. The holder's name is not known and the shares are traded on the stock exchange. Registered shares are held in the name of a specific person and are usually only held by a small group of people.

There is also a distinction between common and preferred shares. Ordinary shares grant the holder voting rights at the Annual General Meeting, while preferred shares generally do not. On the other hand, holders of preferred shares usually receive a higher dividend. In recent years, however, preferred shares have become less common. One well-known company where both types are very actively traded is Volkswagen.

The stock price can be used to determine the market value of a company. This is also known as market capitalization, which is the result if you multiply the shares in circulation by the share price. If a company has issued one million shares and is quoted for 81 euros, this results in a market capitalization of 81 million euros.

If you look at the price, you have to distinguish between different prices. The price is often taken to be the value of the last transaction. This is the price at which the buyer and seller have agreed on a transaction. There are also bid and ask prices. The bid price is the price at which buyers are willing to buy. In contrast, the asking price is the price at which sellers are willing to sell.

Why buy shares?

Shares make it possible to acquire an interest in a company quickly and inexpensively - measured in terms of effort and transaction fees. This also allows private investors to participate in the success (and failure) of a wide variety of companies. The long-term idea is always the success and growth of the company. In this case, investors benefit from rising share prices, i.e. their participation increases in value. Many companies also pay out a share of profits in the form of dividends.

Shareholders also have an influence on corporate policy. At the Annual General Meeting, decisions are made on important steps such as acquisitions and mergers. In addition, the meeting elects the Supervisory Board, which oversees the company's operational measures. Stock corporations are obliged to inform their shareholders about the company's development. Therefore, companies issue detailed annual reports, provide forecasts on profit and sales expectations, and must inform if they fail to meet these expectations.

The importance of shares in brief:

  • Stocks make it easy for investors to participate in publicly traded companies.
  • Investors participate in the success of the company through the payment of dividends
  • The stock market value of a company consists of the number of shares issued multiplied by the current share price.

No comments

댓글 남기기
Your Email Address Will Not Be Published.



TriveHub, 금융 역량 강화의 시작 

저희의 포괄적인 금융 교육 플랫폼인 TriveHub를 탐험해 보세요. 시장 인사이트, 전문가 가이드, 프리미엄 콘텐츠가 함께 모여 여러분의 투자 여정을 형성합니다. 주식, 통화, 가상화폐 등 어떤 것이 관심을 끌든지, 우리는 여러분이 정보에 기반한 결정을 내릴 수 있도록 필요한 지식을 제공합니다.
모든 금융 상품은 마진 거래 시 자본에 높은 위험을 수반합니다.모든 투자자에게 적합하지 않으며 초기 예치금보다 더 많은 손실을 입을 수 있습니다. 관련된 위험을 완전히 이해하고 필요한 경우 독립적인 조언을 구하시기 바랍니다. 자세한 내용은 전체 위험 공시, 영업 약관, 개인정보 보호정책을 참조하십시오. 
로그인 기능 지원 및 신뢰할 수 있는 미디어 파트너가 사이트 사용량을 분석할 수 있도록 쿠키를 사용합니다. 쿠키를 활성화한 상태로 사이트를 탐색하면 전체 사이트 경험을 즐길 수 있습니다. 쿠키 사용에 동의하게 되며, 자세한 내용은 쿠키 정보를 참조하십시오.
이 웹사이트(trivehub.com)는 Trive International의 소유이며, Trive International Ltd.의 등록 상표입니다. Trive International Ltd.는 영국령 버진 아일랜드 금융 당국인 금융 서비스 위원회(FSC BVI)의 인가 및 규제를 받으며, 회사 번호 1728826 및 라이선스 번호 BVI SIBA/L/14/1066으로 등록되어 있습니다.

© 2024 Trivehub

Trivehub is operated by Trive International. The information on this site is for informational purposes only and does not constitute investment advice.